BLBG: U.S. Index Futures Are Little Changed Before Fed Decision
U.S. stock-index futures were little changed, after equities rose the most in almost a month, as investors awaited the outcome of a two-day Federal Reserve meeting to gauge the outlook for interest rates.
U.S. Steel Corp. climbed 6.4 percent in premarket trading after putting its Canada unit in creditor protection and canceling some investments. Auxilium Pharmaceuticals Inc. surged 41 percent after Endo International Plc offered $2.2 billion for the company. Adobe Systems Inc. fell 4.6 percent after posting quarterly sales that missed estimates.
Futures on the Standard & Poor’s 500 Index (SPX) expiring in December slipped less than 0.1 percent to 1,991.2 at 7:24 a.m. in New York. The S&P 500 gained 0.8 percent yesterday, the most since Aug. 18, as rising oil prices drove a rally in energy shares. The equity benchmark is 0.4 percent below a record level reached on Sept. 5. Dow Jones Industrial Average contracts rose 3 points, less than 0.1 percent, to 17,057 today.
“The communication from the Fed on the economy and the timing of the rate hike is very important,” said Pierre Mouton, who helps oversee about $8 billion at Notz, Stucki & Cie. in Geneva. “Yellen has to stay vague about the timing. In the short-term, the best case scenario is that the Fed says it will not raise interest rates before a long time, but the economy is doing very well.”
Fed officials will maintain interest rates at a record low when they announce their decision at 2 p.m. in Washington, according to economists in a Bloomberg survey. The central bank may reduce monthly bond purchases by $10 billion to $15 billion, keeping it on track to announce an end to the program in October, economists surveyed by Bloomberg predicted.
Yellen Speaks
Chair Janet Yellen will hold a press conference at 2:30 p.m. Investors speculate the central bank will maintain its pledge to keep its benchmark rate low for a considerable time after it completes the monthly bond purchases.
U.S. Steel rose 6.4 percent to $44.06. The steelmaker that has reported five years of losses said the Ontario Superior Court granted protection for its Canada unit. The largest U.S. steelmaker by volume also said it canceled $800 million of capital investments in projects in Minnesota and Indiana.
Auxilium jumped 41 percent to $30.42. Endo said it bid $28.10 a share in cash and stock, a 31 percent premium on yesterday’s closing price, for the maker of men’s health medicines. Endo said its offer didn’t include a deal for QLT Inc., which Auxilium agreed to take control of in June. That purchase hasn’t yet closed. Auxilium today said it has adopted a one-year holder rights plan and confirmed its QLT offer.
Lennar Corp. (LEN) climbed 5.3 percent to $41.21 after the second-biggest U.S. homebuilder by market value reported fiscal third-quarter net income of 78 cents a share, exceeding the 67-cent average of analysts in a Bloomberg survey.
Adobe lost 4.6 percent to $67.50 in early New York trading after reporting third-quarter sales of $1.01 billion. Analysts on average estimated revenue of $1.02 billion. The software maker posted profit before some items of 28 cents a share, exceeding analysts’ projections for 26 cents.
Rackspace Hosting Inc. tumbled 19 percent to $32.05 after saying it rejected bid offers. The cloud-computing company decided to remain independent after ending a review on strategic options, and rebuffed investor calls to buy back shares, saying it will preserve cash for future acquisitions.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Alan Soughley, Srinivasan Sivabalan
